Consolidated Financial Highlights (unaudited)

(in thousands of dollars except per share amounts) Three months ended Six months ended
June 30, 2023   June 30, 2022   June 30, 2023   June 30, 2022  
Net earnings 8,114   3,594   63   2,501  
Basic and diluted earnings per share 0.33   0.15   0.00   0.10  

Operating Data

  Three months ended Six months ended
  June 30, 2023   June 30, 2022   June 30, 2023   June 30, 2022  
Canadian Full Privilege Golf Members         15,156   15,583  
Championship rounds – Canada 391,000   444,000   391,000   444,000  
18-hole equivalent championship golf courses – Canada         35.5   37.5  
18-hole equivalent managed championship golf courses – Canada         2.0   2.0  
Championship rounds – U.S. 55,000   55,000   169,000   167,000  
18-hole equivalent championship golf courses – U.S.         8.0   8.0  

The following is an analysis of net earnings:

    For the three months ended
(thousands of Canadian dollars)   June 30, 2023 June 30, 2022
       
Operating revenue   $ 64,653   $ 52,736  
Direct operating expenses (1)     53,834     39,569  
       
Net operating income (1)     10,819     13,167  
       
Amortization of membership fees     1,137     1,081  
       
Depreciation and amortization     (3,492 )   (4,458 )
       
Interest, net and investment income     2,201     422  
       
Other items     176     (3,582 )
       
Income taxes     (2,727 )   (3,036 )
       
Net earnings   $ 8,114   $ 3,594  

    For the six months ended
(thousands of Canadian dollars)   June 30, 2023 June 30, 2022
       
Operating revenue   $ 91,163   $ 90,668  
Direct operating expenses (1)     74,973     72,523  
       
Net operating income (1)     16,190     18,145  
       
Amortization of membership fees     2,113     2,020  
       
Depreciation and amortization     (6,954 )   (8,882 )
       
Interest, net and investment income     4,281     698  
       
Other items     (13,572 )   (6,152 )
       
Income taxes     (1,995 )   (3,328 )
       
Net earnings   $ 63   $ 2,501  

The following is a breakdown of net operating income (loss) by segment:

    For the three months ended
(thousands of Canadian dollars)   June 30, 2023 June 30, 2022
       
Net operating income (loss) by segment      
Canadian golf club operations   $ 10,289   $ 12,675  
US golf club operations      
(2023 - US $744,000; 2022 - US $421,000)     1,001     529  
Corporate and other     (471 )   (37 )
       
       
Net operating income (1)   $ 10,819   $ 13,167  

    For the six months ended
(thousands of Canadian dollars)   June 30, 2023 June 30, 2022
       
Net operating income (loss) by segment      
Canadian golf club operations   $ 13,141   $ 16,583  
US golf club operations      
(2023 - US $3,139,000; 2022 - US $2,857,000)     4,238     3,613  
Corporate and other     (1,189 )   (2,051 )
       
       
Net operating income (1)   $ 16,190   $ 18,145  

Operating revenue is calculated as follows:

    For the three months ended
(thousands of Canadian dollars)   June 30, 2023 June 30, 2022
       
Annual dues   $ 17,766   $ 17,286  
Golf     13,252     13,842  
Corporate events     2,591     2,573  
Food and beverage     10,011     10,382  
Merchandise     4,528     4,301  
Real estate     15,530     3,037  
Rooms and other     975     1,315  
       
Operating revenue   $ 64,653   $ 52,736  

    For the six months ended
(thousands of Canadian dollars)   June 30, 2023 June 30, 2022
       
Annual dues   $ 34,676   $ 34,088  
Golf     19,773     19,680  
Corporate events     2,617     2,597  
Food and beverage     11,439     11,325  
Merchandise     5,920     5,521  
Real estate     15,530     15,811  
Rooms and other     1,208     1,646  
       
Operating revenue   $ 91,163   $ 90,668  

Direct operating expenses are calculated as follows:

    For the three months ended
(thousands of Canadian dollars)   June 30, 2023 June 30, 2022
       
Operating cost of sales   $ 6,235   $ 5,974  
       
Real estate cost of sales     15,277     2,370  
       
Labour and employee benefits     19,818     18,822  
       
Utilities     1,841     1,966  
       
Selling, general and administrative expenses   1,327     1,460  
       
Property taxes     685     695  
       
Repairs and maintenance     1,124     1,556  
       
Insurance     1,502     903  
       
Turf operating expenses     2,057     2,108  
       
Fuel and oil     401     621  
       
Other operating expenses     3,567     3,094  
       
Direct Operating Expenses (1)   $ 53,834   $ 39,569  

    For the six months ended
(thousands of Canadian dollars)   June 30, 2023 June 30, 2022
       
Operating cost of sales   $ 7,780   $ 7,302  
       
Real estate cost of sales     15,277     16,394  
       
Labour and employee benefits     29,378     27,498  
       
Utilities     3,578     3,640  
       
Selling, general and administrative expenses   2,812     2,884  
       
Property taxes     2,536     2,335  
       
Repairs and maintenance     2,199     1,781  
       
Insurance     2,833     2,626  
       
Turf operating expenses     2,364     2,358  
       
Fuel and oil     539     735  
       
Other operating expenses     5,677     4,970  
       
Direct Operating Expenses (1)   $ 74,973   $ 72,523  

(1) Please see Non-IFRS Measures

Second Quarter 2023 Consolidated Operating Highlights

Operating revenue increased 22.6% to $64,653,000 for the three month period ended June 30, 2023 from $52,736,000 in 2022 due to the revenue from the eight Highland Gate home sales in 2023 as compared to two in 2022.

Direct operating expenses increased 36.1% to $53,834,000 for the three month period ended June 30, 2023 from $39,569,000 in 2022 due to the cost of sales from the eight Highland Gate home sales in 2023 as compared to two in 2022.

Net operating income for the Canadian golf club operations segment decreased to $10,289,000 for the three month period ended June 30, 2023 from $12,675,000 in 2022 due to the conclusion of ClubLink’s lease of The Country Club which expired as of December 31, 2023.

Depreciation and amortization decreased 21.7% to $3,492,000 in 2023 from $4,458,000 in 2022 due to the conclusion of The Country Club lease which has also resulted in a decline in depreciation of right-of-use assets.

Interest, net and investment income increased to $2,201,000 for the three month period ended June 30, 2023 from $422,000 in 2022 due to a decrease in borrowings and an increase in distributions from the Company’s investment in Automotive Properties REIT.

Other items consist of the following income (loss) items:

  For the three months ended
  June 30, 2023 June 30, 2022
     
Foreign exchange gain $ 453   $ 481  
Unrealized loss on investment in marketable securities   (474 )   (8,366 )
Equity income (loss) from investments in joint ventures   260     (62 )
Gain on real estate fund investments   -     4,370  
Other loss   (63 )   (5 )
     
Other items $ 176   $ (3,582 )
     

At June 30, 2023, the Company recorded unrealized losses of $474,000 on its investment in marketable securities (June 30, 2022 - $8,366,000). This loss is attributable to the fair market value adjustments of the Company's investment in Automotive Properties REIT.

The exchange rate used for translating US denominated assets has changed from 1.3544 at December 31, 2022 to 1.3240 at June 30, 2023. This has resulted in a foreign exchange gain of $453,000 for the three month period ended June 30, 2023 on the translation of the Company’s US denominated financial instruments. Net earnings increased to $8,114,000 for the three month period ended June 30, 2023 from $3,594,000 in 2022 due to an unrealized loss on the Company’s investment in Automotive Properties REIT in the amount of $8,366,000 recorded in 2022 as compared to $474,000 in 2023. Basic and diluted earnings per share increased to 33 cents per share in 2023, compared to basic and diluted earnings per share of 15 cents in 2022.

Non-IFRS Measures

TWC uses non-IFRS measures as a benchmark measurement of our own operating results and as a benchmark relative to our competitors. We consider these non-IFRS measures to be a meaningful supplement to net earnings. We also believe these non-IFRS measures are commonly used by securities analysts, investors and other interested parties to evaluate our financial performance. These measures, which included direct operating expenses and net operating income do not have standardized meaning under IFRS. While these non-IFRS measures have been disclosed herein to permit a more complete comparative analysis of the Company’s operating performance and debt servicing ability relative to other companies, readers are cautioned that these non-IFRS measures as reported by TWC may not be comparable in all instances to non-IFRS measures as reported by other companies.

The glossary of financial terms is as follows:

Direct operating expenses = expenses that are directly attributable to company’s business units and are used by management in the assessment of their performance. These exclude expenses which are attributable to major corporate decisions such as impairment.

Net operating income = operating revenue – direct operating expenses

Net operating income is an important metric used by management in evaluating the Company’s operating performance as it represents the revenue and expense items that can be directly attributable to the specific business unit’s ongoing operations. It is not a measure of financial performance under IFRS and should not be considered as an alternative to measures of performance under IFRS. The most directly comparable measure specified under IFRS is net earnings.

Eligible Dividend

Today, TWC Enterprises Limited announced an eligible cash dividend of 5 cents per common share to be paid on September 15, 2023 to shareholders of record as at August 31, 2023.

Corporate Profile

TWC is engaged in golf club operations under the trademark, “ClubLink One Membership More Golf.” TWC is Canada’s largest owner, operator and manager of golf clubs with 45 ½ 18-hole equivalent championship and 2.5 18-hole equivalent academy courses (including two managed properties) at 35 locations in Ontario, Quebec and Florida.

For further information please contact:

Andrew Tamlin Chief Financial Officer 15675 Dufferin Street King City, Ontario L7B 1K5 Tel: 905-841-5372 Fax: 905-841-8488 atamlin@clublink.ca

Management’s discussion and analysis, financial statements and other disclosure information relating to the Company is available through SEDAR and at www.sedar.com and on the Company website at www.twcenterprises.ca 

TWC Enterprises (TSX:TWC)
Historical Stock Chart
From Mar 2024 to Apr 2024 Click Here for more TWC Enterprises Charts.
TWC Enterprises (TSX:TWC)
Historical Stock Chart
From Apr 2023 to Apr 2024 Click Here for more TWC Enterprises Charts.